Newsletter
RESTRICTIONS ON BUSINESS VOLUMES OF SECURITIES DEALERS WITH LOW BANK OF INTERNATIONAL SETTLEMENT RATIO
As of February 1999, the Securities and Future Commission (SFC) will restrict the business volumes of securities firms with low bank of international settlement ratio (BIS ratio) in accordance with the Management Measures for Self-Owned Capital of Securities Firms. Under the measures, the baseline BIS ratio for securities firms is 150%. In other words, a securities firm must have NT$1.5 in eligible capital to be permitted to handle NT$1 in risk business. As of February this year, the SFC will divide securities firms whose business falls below the baseline factor into three categories - 120% to 150%, 100% to 120%, and under 100% - and will place commensurate restrictions on their business volume multiples, i.e., the multiples of the amount of their available capital relative to the amount they may invest on behalf of their clients.